Ecuador Economy Profile - Doing Business 2020
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Doing Business 2020 Ecuador
Economy Profile
Ecuador
Page 1
Doing Business 2020 Ecuador
Economy Profile of Ecuador
Doing Business 2020 Indicators
(in order of appearance in the document)
Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company
Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety
mechanisms in the construction permitting system
Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the
transparency of tariffs
Registering property Procedures, time and cost to transfer a property and the quality of the land administration system
Getting credit Movable collateral laws and credit information systems
Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance
Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling
processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for
insolvency
Employing workers Flexibility in employment regulation and redundancy cost
Page 2Doing Business 2020 Ecuador
About Doing Business
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and
regional level.
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life
cycle.
Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for
starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across
borders, enforcing contracts and resolving insolvency. Doing Business also measures features of employing workers. Although Doing Business does not present rankings
of economies on the employing workers indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does
present the data for these indicators.
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages
economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector
researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation.
These studies provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected
cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked.
The first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study covers 11 indicator sets and 190 economies. Most
indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013
(Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data
for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from
feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the
regulatory environment for business around the world.
To learn more about Doing Business please visit doingbusiness.org
Page 3Doing Business 2020 Ecuador
Ease of Doing Business in DB RANK DB SCORE
Region Latin America & Caribbean
Ecuador
Income Category Upper middle income
Population 17,084,357 129 57.7
City Covered Quito
Rankings on Doing Business topics - Ecuador
73
100 96
103
114 114
119
147
160
177
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Topic Scores
69.1 66.4 72.3 67.7 45.0 44.0 58.6 71.2 57.5 25.5
Starting a Business (rank) 177 Getting Credit (rank) 119 Trading across Borders (rank) 103
Score of starting a business (0-100) 69.1 Score of getting credit (0-100) 45.0 Score of trading across borders (0-100) 71.2
Procedures (number) 11 Strength of legal rights index (0-12) 1 Time to export
Time (days) 48.5 Depth of credit information index (0-8) 8 Documentary compliance (hours) 24
Cost (number) 33 Credit registry coverage (% of adults) 0.0 Border compliance (hours) 96
Paid-in min. capital (% of income per capita) 0.0 Credit bureau coverage (% of adults) 79.7 Cost to export
Documentary compliance (USD) 60
Dealing with Construction Permits (rank) 114 Protecting Minority Investors (rank) 114 Border compliance (USD) 560
Score of dealing with construction permits (0-100) 66.4 Score of protecting minority investors (0-100) 44.0 Time to export
Procedures (number) 17 Extent of disclosure index (0-10) 2.0 Documentary compliance (hours) 120
Time (days) 132 Extent of director liability index (0-10) 5.0 Border compliance (hours) 24
Cost (% of warehouse value) 1.8 Ease of shareholder suits index (0-10) 6.0 Cost to export
Building quality control index (0-15) 8.0 Extent of shareholder rights index (0-6) 5.0 Documentary compliance (USD) 75
Extent of ownership and control index (0-7) 3.0 Border compliance (USD) 250
Getting Electricity (rank) 100 Extent of corporate transparency index (0-7) 1.0
Score of getting electricity (0-100) 72.3 Enforcing Contracts (rank) 96
Procedures (number) 7 Paying Taxes (rank) 147 Score of enforcing contracts (0-100) 57.5
Time (days) 74 Score of paying taxes (0-100) 58.6 Time (days) 523
Cost (% of income per capita) 602.4 Payments (number per year) 8 Cost (% of claim value) 27.2
Reliability of supply and transparency of tariff index (0-8) 7 Time (hours per year) 664 Quality of judicial processes index (0-18) 6.5
Total tax and contribution rate (% of profit) 34.4
Registering Property (rank) 73 Postfiling index (0-100) 49.5 Resolving Insolvency (rank) 160
Score of registering property (0-100) 67.7 Score of resolving insolvency (0-100) 25.5
Procedures (number) 8 Recovery rate (cents on the dollar) 18.3
Time (days) 26 Time (years) 5.3
Cost (% of property value) 2.1 Cost (% of estate) 18.0
Quality of the land administration index (0-30) 16.5 Outcome (0 as piecemeal sale and 1 as going 0
concern)
Strength of insolvency framework index (0-16) 5.0
Page 4Doing Business 2020 Ecuador
Starting a Business
This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and
formally operate in each economy’s largest business city.
To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to
10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of
operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one
company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their
scores for starting a business. These scores are the simple average of the scores for each of the component indicators.
The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally start and formally operate a company To make the data comparable across economies, several assumptions about the business and the
(number) procedures are used. It is assumed that any required information is readily available and that the
entrepreneur will pay no bribes.
• Preregistration (for example, name verification or reservation,
notarization)
The business:
• Registration in the economy’s largest business city -Is a limited liability company (or its legal equivalent). If there is more than one type of limited
• Postregistration (for example, social security registration, liability company in the economy, the limited liability form most common among domestic firms is
company seal) chosen. Information on the most common form is obtained from incorporation lawyers or the
statistical office.
• Obtaining approval from spouse to start a business or to leave
-Operates in the economy’s largest business city. For 11 economies the data are also collected for
the home to register the company
the second largest business city.
• Obtaining any gender specific document for company -Performs general industrial or commercial activities such as the production or sale to the public of
registration and operation or national identification card goods or services. The business does not perform foreign trade activities and does not handle
products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily
Time required to complete each procedure (calendar days)
polluting production processes.
• Does not include time spent gathering information -Does not qualify for investment incentives or any special benefits.
-Is 100% domestically owned.
• Each procedure starts on a separate day (2 procedures cannot -Has five business owners, none of whom is a legal entity. One business owner holds 30% of the
start on the same day)
company shares, two owners have 20% of shares each, and two owners have 15% of shares
• Procedures fully completed online are recorded as ½ day each.
-Is managed by one local director.
• Procedure is considered completed once final document is
received -Has between 10 and 50 employees one month after the commencement of operations, all of them
domestic nationals.
• No prior contact with officials -Has start-up capital of 10 times income per capita.
-Has an estimated turnover of at least 100 times income per capita.
Cost required to complete each procedure (% of income per
-Leases the commercial plant or offices and is not a proprietor of real estate.
capita)
-Has an annual lease for the office space equivalent to one income per capita.
• Official costs only, no bribes -Is in an office space of approximately 929 square meters (10,000 square feet).
-Has a company deed that is 10 pages long.
• No professional fees unless services required by law or
commonly used in practice
The owners:
Paid-in minimum capital (% of income per capita)
-Have reached the legal age of majority and are capable of making decisions as an adult. If there
• Funds deposited in a bank or with third party before registration is no legal age of majority, they are assumed to be 30 years old.
or up to 3 months after incorporation -Are in good health and have no criminal record.
-Are married, the marriage is monogamous and registered with the authorities.
-Where the answer differs according to the legal system applicable to the woman or man in
question (as may be the case in economies where there is legal plurality), the answer used will be
the one that applies to the majority of the population.
Page 5Doing Business 2020 Ecuador
Starting a Business - Ecuador
Standardized Company
Legal form Compañía Limitada
Paid-in minimum capital requirement No minimum
City Covered Quito
Indicator Ecuador Latin America & OECD high Best Regulatory
Caribbean income Performance
Procedure – Men (number) 11 8.1 4.9 1 (2 Economies)
Time – Men (days) 48.5 28.8 9.2 0.5 (New Zealand)
Cost – Men (% of income per capita) 33.0 31.4 3.0 0.0 (2 Economies)
Procedure – Women (number) 11 8.1 4.9 1 (2 Economies)
Time – Women (days) 48.5 28.8 9.2 0.5 (New Zealand)
Cost – Women (% of income per capita) 33.0 31.4 3.0 0.0 (2 Economies)
Paid-in min. capital (% of income per capita) 0.0 0.4 7.6 0.0 (120 Economies)
Figure – Starting a Business in Ecuador – Score
41.2 51.8 83.5 100.0
Procedures Time Cost Paid-in min. capital
Figure – Starting a Business in Ecuador and comparator economies – Ranking and Score
DB 2020 Starting a Business Score
0 100
91.4: Chile (Rank: 57)
87.0: Colombia (Rank: 95)
82.1: Peru (Rank: 133)
80.4: Argentina (Rank: 141)
79.6: Regional Average (Latin America & Caribbean)
69.1: Ecuador (Rank: 177)
Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of
the scores for each of the component indicators.
Page 6Doing Business 2020 Ecuador
Figure – Starting a Business in Ecuador – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
14
12
Cost (% of income per capita)
40
10
Time (days)
30
8
20 6
4
10
2
0 0
1 2 3 4 5 6 7 8 9 10 11
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
reflected here, see the summary below.
Page 7Doing Business 2020 Ecuador
Details – Starting a Business in Ecuador – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Reservation of the company name at the Superintendence of Companies Less than one day no charge
Agency : Superintendence of Companies (National Ecuadorian Office of Companies) (online procedure)
The reservation of the company name is done online at:
http://www.supercias.gob.ec/portalConstitucionElectronica/
The certificate of reservation is valid for 30 days.
2 Hire a lawyer to prepare the minutes of incorporation 1 day USD 800-1,000
Agency : Lawyer
The minutes include the constituting contract, the articles of incorporation, the company’s bylaws,
and the formation of capital. A lawyer must prepare and sign the minutes for the company’s
incorporation. Moreover, a notary public must notarize these documents; the lawyer cannot do so.
The cost includes all the operating expenses and legal fees.
3 Notarize the charter of incorporation and bylaws 2 days USD 689.5
Agency : Notary
The entrepreneurs need to notarize the charter of incorporation and the bylaws with a notary
public.
The notarization cost of the charter of incorporation and bylaws is based on the submitted capital
of the company. Under our company assumptions, the cost is 1.75 points of the minimum wage
(SBU) in Ecuador.
4 Register at the Superintendence of Companies for the annual contribution 1 day no charge
Agency : Superintendence of Companies
The article 449.3 of the Law of Corporations determines the obligation for the company to get its
number and pay the annual registration fee (0.71 % of total assets) at the Superintendence of
Companies.
In order to do so, the following documents are required:
- A form with the address of the new company, the name of the appointed legal representative and
the identifications of both the legal representative and the founding partners
- A certified copy of the public deed of the constitution of the company
Once this information is presented, within 24 hours the information of the company will be
uploaded online and the company would be registered, the number given to the company will
appear in the general information of the company on the website. The company can pay the 50%
of the contribution until September 30th, and the remaining 50% until December 31st of each year.
5 Register the company’s charter and resolutions, as well as the name of the company’s 5 days USD 25 + 0.5% of start-up
legal representatives in the Mercantile Registry Office capital + USD 25 for each
Agency : Mercantile Registry owner
After inscribing the charter, resolution, and the name of the legal representatives, the Mercantile
Registry office (“Registro Mercantil”) will provide a registration number (“Numero de codigo”) with
the date that the company began its legal existence.
6 Apply for the Tax identification number (Registro Unico de Contribuyentes, RUC) 4 days no charge
Agency : Tax Authorities (Servicio de Rentas Internas, SRI)
The Tax ID (Registro Unico de Contribuyentes, RUC) must be obtained:
(a) once the constitution procedure is completed; and (b) after the company has appointed its
legal representatives and registered those appointments in the Register of Commerce. The
application procedure is done at the Tax Authorities (Servicio de Rentas Internas, SRI) and takes
48 hours after the submission of all required documents (the registered deed, and the registered
appointments).
Because the VAT (Impuesto al Valor Agregado, IVA) goes by the same identification number, it
does not require a separate registration. The RUC is obtained immediately, but a paper receipt is
sent by mail in the following 3 days.
7 Print invoices and VAT forms at an authorized printing shop 1 day USD 40
Agency : Any authorized print shop
With the RUC, companies must buy invoices from SRI-authorized companies and state monthly
VAT declarations on special forms. The cost to print a 100-page book of invoices (one original and
two copies) is about USD 40.
Page 8Doing Business 2020 Ecuador
8 Sign up online for Social Security (Instituto Ecuatoriano de Seguridad Social, IESS) and 2 days no charge
obtain a password to operate the online system
Agency : Ecuadorian Institute of Social Security (Instituto Ecuatoriano de Seguridad Social, IESS)
The company must present a petition for an employer identification number (cédula patronal). This
identification number is obligatory for employers for purposes of social security, payments
covering health, pension, accident and work-related illness.
An employer can register with the Social Security online through the webpage of Ecuador’s Social
Security Institute. After completing the registration online, the employer needs to obtain a
password which will allow the employer to operate the system online.
The day after registering online, the employer can present the documents/information to the Social
Security and obtain the password to operate the online system. The online system will allow the
employer to register all employees’ movements (entries of new employees and termination of the
employment contract, contributions, etc.).
9 Register all employee contracts with the Ministry of Labor (SENRES) 2 days no charge
Agency : National Technical Secretariat of Human Resources Development and Public Sector
(Secretaría Nacional Técnica de Desarrollo de Recursos Humanos y de Remuneraciones del
Sector Público, SENRES)
The department responsible for registering labor contracts is the National Technical Secretariat of
Human Resources Development and Public Sector Remuneration (Secretaría Nacional Técnica
de Desarrollo de Recursos Humanos y de Remuneraciones del Sector Público, SENRES).
SENRES is part of the Ministry of Labor.
10 Obtain an Operations Permit (Licencia Metropolitana Única para el Ejercicio de las 29 days no charge
Actividades Económicas, LUAE) from the Municipality
Agency : Municipality of Quito (Administración Zonal del Municipio de Quito)
New companies must apply for an Operations Permit (Licencia Metropolitana Única para el
Ejercicio de las Actividades Económicas, LUAE) in the Municipality of Quito. The LUAE is an
authorization provided by the Municipal government, that is required for any companies to conduct
business activities in the city.
In approximately 15 days after filing the application, the company will receive the inspection of Fire
Department and the Secretary of Environment (Secretaría del Ambiente). Then, in approximately
5 days, these two institutions will give the final report to the Municipality of Quito. If these reports
are favorable, the Municipality will issue the operations permit in approximately 10 days.
11 Register for the Municipal Economic Activities Registry (Registro de Actividades 1 day USD 50
Económicas Tributarias, RAET) and pay the Municipal License tax (Patente Municipal)
Agency : Municipality of Quito (Administración Zonal del Municipio de Quito)
The entrepreneur must register for the Municipal Economic Activities Registry (Registro de
Actividades Económicas Tributarias, RAET) to operate any business activity in the city.
At the same time, the entrepreneur must pay a yearly Municipal License tax (Patente Municipal),
charged as a certification that that every person or company engaged in commercial or industrial
activities is verified by the Municipality. Companies should pay this fee within 30 days following the
last day of the month when the company started operating.
This fee is foreseen in the Law of Municipal Regime, which regulates the operation of
Municipalities in each city. It contemplates the possibility of the Municipalities collecting certain
fees or “tasas”, as a compensation for a service provided by the Municipality.
Takes place simultaneously with previous procedure.
Page 9Doing Business 2020 Ecuador
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications,
requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building
quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional
certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information
What the indicators measure Case study assumptions
Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction
company, the warehouse project and the utility connections are used.
• Submitting all relevant documents and obtaining all necessary
clearances, licenses, permits and certificates
The construction company (BuildCo):
• Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest
inspections
business city. For 11 economies the data are also collected for the second largest business city.
• Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a
licensed architect and a licensed engineer, both registered with the local association of architects
• Registering and selling the warehouse after its completion
or engineers. BuildCo is not assumed to have any other employees who are technical or licensed
Time required to complete each procedure (calendar days) experts, such as geological or topographical experts.
- Owns the land on which the warehouse will be built and will sell the warehouse upon its
• Does not include time spent gathering information completion.
• Each procedure starts on a separate day—though procedures
that can be fully completed online are an exception to this rule The warehouse:
• Procedure is considered completed once final document is - Will be used for general storage activities, such as storage of books or stationery.
received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6
square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be
• No prior contact with officials located on a land plot of approximately 929 square meters (10,000 square feet) that is 100%
owned by BuildCo, and the warehouse is valued at 50 times income per capita.
Cost required to complete each procedure (% of income per
- Will have complete architectural and technical plans prepared by a licensed architect. If
capita)
preparation of the plans requires such steps as obtaining further documentation or getting prior
• Official costs only, no bribes approvals from external agencies, these are counted as procedures.
- Will take 30 weeks to construct (excluding all delays due to administrative and regulatory
Building quality control index (0-15) requirements).
• Quality of building regulations (0-2)
The water and sewerage connections:
• Quality control before construction (0-1)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water
• Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage
• Quality control after construction (0-3) infrastructure, a septic tank in the smallest size available will be installed or built.
- Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow
• Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and
• Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day.
- Will have a constant level of water demand and wastewater flow throughout the year; will be 1
inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.
Page 10Doing Business 2020 Ecuador
Dealing with Construction Permits - Ecuador
Standardized Warehouse
Estimated value of warehouse USD 309,200.70
City Covered Quito
Indicator Ecuador Latin America & OECD high Best Regulatory
Caribbean income Performance
Procedures (number) 17 15.5 12.7 None in 2018/19
Time (days) 132 191.2 152.3 None in 2018/19
Cost (% of warehouse value) 1.8 3.6 1.5 None in 2018/19
Building quality control index (0-15) 8.0 9.0 11.6 15.0 (6 Economies)
Figure – Dealing with Construction Permits in Ecuador – Score
52.0 69.5 90.9 53.3
Procedures Time Cost Building quality control index
Figure – Dealing with Construction Permits in Ecuador and comparator economies – Ranking and Score
DB 2020 Dealing with Construction Permits Score
0 100
75.9: Chile (Rank: 41)
72.5: Peru (Rank: 65)
69.1: Colombia (Rank: 89)
66.4: Ecuador (Rank: 114)
63.2: Regional Average (Latin America & Caribbean)
56.4: Argentina (Rank: 155)
Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores
are the simple average of the scores for each of the component indicators.
Page 11Doing Business 2020 Ecuador
Figure – Dealing with Construction Permits in Ecuador – Procedure, Time and Cost
Time (days) Cost (% of warehouse value)
0.7
120
0.6
Cost (% of warehouse value)
100
0.5
Time (days)
80
0.4
60
0.3
40 0.2
20 0.1
0 0
1 *2 3 4 5 6 7 8 9 10 11 12 13 14 * 15 16 * 17
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
reflected here, see the summary below.
Page 12Doing Business 2020 Ecuador
Figure – Dealing with Construction Permits in Ecuador and comparator economies – Measure of Quality
14 13.0 13.0
12 11.0 11.0
Index score
10 9.0
8.0
8
6
4
2
0
Ecuador Argentina Chile Colombia Peru Latin
America
&
Caribbean
Details – Dealing with Construction Permits in Ecuador – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Request and obtain a soil test 18 days USD 1,750
Agency : Private laboratory
Based on Chapter 10 of the Norma Ecuatoriana de las Construccion Article 10.6.2, a soil test is
required for the stability of the foundation.
2 Obtain a topographical map 6 days USD 1,500
Agency : Private Engineer
Based on Chapter 10 of the Norma Ecuatoriana de las Construccion Chapter 10: Article 10.6.3, a
topographical survey is needed.
3 Obtain urban regulation report (Informe de Regulación Urbana - IRM) 15 days USD 2
Agency : Municipality of Quito (Municipio de Quito, Administración Zonal)
The Urban Regulation Report (Informe de Regulacion Urbana, IRM) is required for most
procedures before the District Municipality, such as purchasing, selling, dividing, and building a
property, as well as determining if the site is affected by road construction design.
Valid for 2 years, this report provides the parameters to subdivide or urbanize the following:
• Area available to construct the ground floor
• Maximum building area
• Maximum building height permitted
• Maximum number of dwelling units
• Building separation distances
• Permitted and unauthorized land use
• Basic service availability
• Manufacturing line (línea de fábrica) reference
To obtain the report, BuildCo must do the following:
• Purchase the IRM form, whose value is equivalent to 5% of the effective unified basic wage
(salario básico unificado vigente) at the respective Subdivision Administration (Administración
Zonal)
• Register the property's data and enclose a copy of the property tax payment receipt
• Submit copies of the citizenship identification and of the updated voting voucher or owner's
exemption certificate
• Enclose a cartographic sheet of the Geographical Military Institute (scale, 1:5,000 or 1:25,000),
showing the exact property location and the respective public deeds registered at the Property
Registry
• Enclose a copy of the public writ of the estate (a request signed by the owner to guarantee the
payment of water, electricity, or telephone service)
4 Obtain proof of compliance with contribution to Association of Architects 1 day USD 309
Agency : Association of Architects of Ecuador (Colegio de Arquitectos del Ecuador – CAE) and/or
Association of Civil Engineers of Pichincha (Colegio de Ingenieros Civiles de Pichincha)
The proof of payment for the construction contribution is one of the documents required for the
approval of the plans and the building permit application. The cost is 0.1% of the warehouse
value.
5 Request and obtain permit from the Fire Department 15 days USD 200
Agency : Fire Department
Once the regulation report and the proof of compliance are granted, BuildCo. can initiate the
request to obtain a fire permit form the Fire Department.
Page 13Doing Business 2020 Ecuador
6 Request approval of the plans 20 days USD 464
Agency : Association of Architects of Ecuador (Colegio de Arquitectos del Ecuador – CAE) and/or
Association of Civil Engineers of Pichincha (Colegio de Ingenieros Civiles de Pichincha)
To request approval of the plans, the following documents must be submitted to the Subdivision
Administration (Administración Zonal):
• Plan approval form for buildings, with data record and stamps
• Metropolitan Regulation Report (Informe de Regulación Metropolitana, IRM), updated
• Two sets of architectural drawings (scale, 1:100 to 1:50), with an area map plotted on the first
sheet of the project. The drawings must contain the plot area, (COS) percentage; (CUS)
percentage; construction area at ground level; total building floor area; and total gross
construction area, including housing area, business store and office area, parking area,
community area, number of dwelling units, and number of parking lots.
• If the construction is financed with a mortgage loan, three additional sets must be attached
• Proof of payment of contribution to the Association of Architects
• Proof of payment of property tax (impuesto predial) corresponding to the current year (simple
copy of receipt)
• Real estate deed or purchase option agreement duly notarized and registered at the Property
Registry
• Copies of the municipal registration and professional registration identification cards
• Copy of the citizenship card and updated voting voucher or owner’s exemption certificate (Los
Chillos deemed unnecessary)
• Certificates granted by the Metropolitan Water and Sewage Utility Company (EMAAP), stating
utility service provision (potable water and sewage) (Los Chillos Administration)
The company may request the approval of the draft project (for consultation before final plan
approval). The plans also must be approved by the Fire Department and the Associations for
Architects and Engineers. The approval of the draft project is valid for 2 years and is informative in
nature.
The fee is 1.5 x 1/1,000 of total project cost.
7 Verify structure plan with Association of Engineers 10 days USD 309
Agency : Association of Architects of Ecuador (Colegio de Arquitectos del Ecuador –CAE) and/or
Association of Civil Engineers of Pichincha (Colegio de Ingenieros Civiles de Pichincha)
After BuildCo. has requested the approval of plans to the Zone Administration Authority, it can
present the structural plans to the Association of Engineers or Architects.
8 Obtain construction guarantee and deposit it with the Municipality 2 days USD 6
Agency : Municipality of Quito (Municipio de Quito)
Proof of the guarantee deposit is a required document for the building permit application. Once the
land plans have been registered for zoning and before their approval, the Municipality notifies the
applicant the amount to be guaranteed (fondo de garantia). The applicant can deposit the
guarantee in cash or certified check or in the form of an insurance policy. The insurance policy is
purchased in 2 days from a local insurance company. The fee to purchase the guarantee depends
on the value to be guaranteed.
After construction is finalized, the Municipality will return the guarantee upon inspecting the
construction. The guarantee will be returned in full only if the actual construction conforms to the
plans approved by the Municipality. It is assumed that the full guarantee is returned to BuildCo
upon successful completion of construction. Therefore, the cost is not recorded.
However, the transaction fee for the guarantee, which amounts to 0.05% of the guarantee itself, is
taken into account because it is non-refundable. The guarantee amount is determined by the
Municipality and depends on the type of construction, the size, the sector, and the relevant zone.
For construction under 600 sq. m., the guarantee will range between 1.5% and 3% of the
warehouse value. For construction over 600 sq. m., the guarantee will be about 4% of the
warehouse value.
Page 14Doing Business 2020 Ecuador
9 Obtain the final building permit 16 days USD 595
Agency : Municipality of Quito/ Empresa Metropolitana de Obras Públicas (EMOP-Q)
The documents required to obtain the construction work execution clearance are the following:
• Building permit application form, with stamps and data record
• Architectural drawing approval report (original or certified copy)
• Set of approved architectural drawings (original or certified copy)
• Sets (two) of structural maps, with the professional signature registration
• Sets (two) of electrical and hydro sanitary installation plans, with the professional signature
registration
• Proof of payment for building work to professional associations
• Proof of the guarantee fund deposit
• Proof of payment for plan and drawing approval
• Proof of payment to the Metropolitan Water and Sewage Utility Company (EMAAP) for service
installation
• Construction statistical sheet
• Copy of municipal and professional registration cards for the builder and designer (Los Chillos)
• Copy of the citizenship card and updated voting voucher or owner’s exemption certificate
• For four stories or more, survey report for soil and subsoil of more than 2.5 mh and structural
calculation report
• Proof of payment received of the corresponding property tax for the current year (La Delicia)
This procedure does not entail any charges. However, the scanner services fee is 20% of the
current minimum wage for each sheet, and a form must be purchased with the required stamps.
The form fee is USD 0.40, which is the same as the cost of the stamps. These fees are on a per-
filing basis, and more than one filing is normally necessary.
10 Request and obtain second unscheduled inspection during the construction period. 1 day no charge
Agency : Municipality of Quito/ Empresa Metropolitana de Obras Públicas (EMOP-Q)
During the construction phase, BuildCo. must request and obtain the first of the two unscheduled
inspections that are conducted by the Municipality.
11 Request and obtain intermediate inspection 1 day no charge
Agency : Municipality of Quito/ Empresa Metropolitana de Obras Públicas (EMOP-Q)
The second inspection that BuildCo. requests during the construction phase.
12 Request potable water and drainage connection 1 day no charge
Agency : Water and Sewage Authority (Empresa Metropolitana de Alcantarillado y Agua Potable -
EMAAP)
The proof of payment for service installation is one of the documents required for the approval of
the layout plans and the building permit application.
13 Receive water and sewage inspection 1 day no charge
Agency : Water and Sewage Authority (Empresa Metropolitana de Alcantarillado y Agua Potable -
EMAAP)
Depending on whether a meter is already available, an inspection may be conducted before
BuildCo obtains its water connection. Given that the project considered here is a new
construction, it is assumed that BuildCo must obtain the meter. Hence, an inspection also takes
place to evaluate the cost of the new service.
14 Obtain potable water and drainage connection 10 days no charge
Agency : Water and Sewage Authority (Empresa Metropolitana de Alcantarillado y Agua Potable -
EMAAP)
Once the inspection has been conducted, Buildco. is ready to have the potable water and the
drainage services connections.
Request and obtain final inspection 10 days no charge
15 Agency : Municipality of Quito/ Unidad de Control de Edificaciones
In the meantime Buildco. can apply for and receive the final inspection.
16 Obtain habitability permit and guarantee retrieval 20 days no charge
Agency : Municipality of Quito (Municipio de Quito)
The habitability permit authorizes BuildCo to bring the building into service and enables retrieval of
the guarantee fund. To this end, BuildCo must present the following documents at the respective
Subdivision Administration (Administración Zonal):
• Inhabitability permit application form, with stamps and data record
• Approved architectural drawings (one copy)
• Plan and drawing approval report
• Building permit
• Original proof of guarantee fund receipt
• Citizenship card and updated voting voucher or owner exemption certificate (copy)
• For guarantee fund retrieval in cash, an application form must be filed with the General Financial
Department (Dirección General Financiera), with the respective stamps
Register the building at the Property Registry 14 days USD 500
17 Agency : Property Registry (Registro de la Propiedad)
It is not needed for BuildCo. to obtain the guarantee retrieval for registering the warehouse at the
competent authority. Once the final inspection is conducted, BuildCo. can initiate the procedure at
the Property Registry. If the value of the property exceeds the amount of USD 10,000, the builder
will pay a flat fee of USD 500 (plus VAT) for property registration.
Page 15Doing Business 2020 Ecuador
Takes place simultaneously with previous procedure.
Page 16Doing Business 2020 Ecuador
Details – Dealing with Construction Permits in Ecuador – Measure of Quality
Answer Score
Building quality control index (0-15) 8.0
Quality of building regulations index (0-2) 1.0
How accessible are building laws and regulations in your economy? (0-1) Available online; Free 1.0
of charge.
Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 0.0
accessible website, brochure or pamphlet? (0-1) documents.
Quality control before construction index (0-1) 1.0
Which third-party entities are required by law to verify that the building plans are in compliance with existing Licensed architect; 1.0
building regulations? (0-1) Licensed engineer.
Quality control during construction index (0-3) 0.0
What types of inspections (if any) are required by law to be carried out during construction? (0-2) Unscheduled 0.0
inspections.
Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 0.0
inspections are
always done in
practice.
Quality control after construction index (0-3) 3.0
Is there a final inspection required by law to verify that the building was built in accordance with the approved Yes, final inspection 2.0
plans and regulations? (0-2) is done by
government agency.
Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0
always occurs in
practice.
Liability and insurance regimes index (0-2) 1.0
Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use Architect or engineer; 1.0
(Latent Defect Liability or Decennial Liability)? (0-1) Professional in
charge of the
supervision;
Construction
company; Owner or
investor.
Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or No party is required 0.0
problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) by law to obtain
insurance .
Professional certifications index (0-4) 2.0
What are the qualification requirements for the professional responsible for verifying that the architectural plans University degree in 1.0
or drawings are in compliance with existing building regulations? (0-2) architecture or
engineering; Being a
registered architect or
engineer.
What are the qualification requirements for the professional who supervises the construction on the ground? (0- University degree in 1.0
2) engineering,
construction or
construction
management; Being
a registered architect
or engineer.
Page 17Doing Business 2020 Ecuador
Getting Electricity
This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally,
the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data
collection for the project was completed in May 2019. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to obtain an electricity connection (number) To make the data comparable across economies, several assumptions about the warehouse, the
electricity connection and the monthly consumption are used.
• Submitting all relevant documents and obtaining all necessary
clearances and permits
The warehouse:
• Completing all required notifications and receiving all necessary - Is owned by a local entrepreneur and is used for storage of goods.
inspections
- Is located in the economy’s largest business city. For 11 economies the data are also collected for
• Obtaining external installation works and possibly purchasing the second largest business city.
material for these works - Is located in an area where similar warehouses are typically located and is in an area with no
physical constraints. For example, the property is not near a railway.
• Concluding any necessary supply contract and obtaining final
supply - Is a new construction and is being connected to electricity for the first time.
- Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square
Time required to complete each procedure (calendar days) feet). The plot of land on which it is built is 929 square meters (10,000 square feet).
• Is at least 1 calendar day The electricity connection:
• Each procedure starts on a separate day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-
• Does not include time spent gathering information kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).
- Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution
• Reflects the time spent in practice, with little follow-up and no network and is either overhead or underground, whichever is more common in the area where the
prior contact with officials
warehouse is located and requires works that involve the crossing of a 10-meter road (such as by
excavation or overhead lines) but are all carried out on public land. There is no crossing of other
Cost required to complete each procedure (% of income per
owners’ private property because the warehouse has access to a road.
capita)
- Does not require work to install the internal wiring of the warehouse. This has already been
• Official costs only, no bribes completed up to and including the customer’s service panel or switchboard and the meter base.
• Value added tax excluded
The monthly consumption:
The reliability of supply and transparency of tariffs index (0-8)
- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours
• Duration and frequency of power outages (0–3) a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts
• Tools to monitor power outages (0–1) (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours
(kWh); hourly consumption is 112 kWh.
• Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.
• Regulatory monitoring of utilities’ performance (0–1) - Tariffs effective in January of the current year are used for calculation of the price of electricity for
the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.
• Financial deterrents limiting outages (0–1)
• Transparency and accessibility of tariffs (0–1)
Price of electricity (cents per kilowatt-hour)*
• Price based on monthly bill for commercial warehouse in case
study
*Note: Doing Business measures the price of electricity, but it is
not included in the ease of doing business score nor in the ranking
on the ease of getting electricity.
Page 18Doing Business 2020 Ecuador
Getting Electricity - Ecuador
Standardized Connection
Name of utility Empresa Electrica Quito
Price of electricity (US cents per kWh) 11.9
City Covered Quito
Indicator Ecuador Latin America & OECD high Best Regulatory
Caribbean income Performance
Procedures (number) 7 5.5 4.4 3 (28 Economies)
Time (days) 74 66.8 74.8 18 (3 Economies)
Cost (% of income per capita) 602.4 407.2 61.0 0.0 (3 Economies)
Reliability of supply and transparency of tariff index (0-8) 7 4.4 7.4 8 (26 Economies)
Figure – Getting Electricity in Ecuador – Score
33.3 75.7 92.6 87.5
Reliability of supply and transparency of
Procedures Time Cost
tariff index
Figure – Getting Electricity in Ecuador and comparator economies – Ranking and Score
DB 2020 Getting Electricity Score
0 100
85.7: Chile (Rank: 39)
76.3: Colombia (Rank: 82)
74.5: Peru (Rank: 88)
72.3: Ecuador (Rank: 100)
71.7: Regional Average (Latin America & Caribbean)
70.0: Argentina (Rank: 111)
Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the
scores for all the component indicators except the price of electricity.
Figure – Getting Electricity in Ecuador – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
500
70
Cost (% of income per capita)
60 400
50
Time (days)
300
40
30 200
20
100
10
0 0
1 2 *3 4 5 *6 7
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the
time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures
Page 19Doing Business 2020 Ecuador
reflected here, see the summary below.
Figure – Getting Electricity in Ecuador and comparator economies – Measure of Quality
8
7 7
7
6 6
Index score
6
5
5 4.4
4
3
2
1
0
Ecuador Argentina Chile Colombia Peru Latin
America
&
Caribbean
Page 20Doing Business 2020 Ecuador
Details – Getting Electricity in Ecuador – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Hire qualified electrical engineer 1 calendar day USD 5,000
Agency : Private Electrical Engineer registered with Empresa Electrica Quito (EEQ)
The customer must hire an electrical engineer listed with Empresa Eléctrica Quito S.A. (EEQ). The
electrical engineer sends the feasibility request to EEQ on behalf of the client. The electrical
engineer also prepares the design to perform the external connection and is in charge of carrying
out the works of the external connection.
2 Submit connection request to EEQ and await feasibility report 9 calendar days USD 0
Agency : Empresa Electrica Quito (EEQ)
The service request must presented to EEQ by the client’s electrical engineer. The applicant must
provide the Service Feasibility Form, attaching the required documents. The service feasibility is
required for projects with a demand greater than 125 kVA. EEQ determines the possibility of
meeting the requested demand in the area in question and establishes the conditions needed to
optimize the use of the network. The applicant should approach with the following documents:
• Letter of authorization from the owner.
• Copy of identity card of the owner.
• Sketch of location in AutoCAD; standards established by the EEQ SA (to provide in hand writing)
• Estimate of the installed load, peak demand and capacity required with the signature of liability
by the qualified Private Engineer EEQ SA
• Service Feasibility Form.
3 Receive site inspection by utility for preparing feasibility study 1 calendar day USD 0
Agency : Empresa Electrica Quito (EEQ)
Taking as reference the sketch of the location, an electrical engineer of Empresa Eléctrica Quito
SA (EEQ) performs the inspection of the site, verifies the technical data of the project and
prepares the technical feasibility report. The Head of the Direccion de Distribucion de la Zona
reviews the technical report for subsequent approval by the Head of the Engineering Division of
Distribution. Finally the customer picks up the approved report at the Secretariat of the relevant
Zone.
4 Await preparation of design by electrical engineer and its approval 20 calendar days USD 2,750
Agency : Private Electrical Engineer registered with Empresa Electrica Quito (EEQ)
Before starting with the external connection works, the private electrical engineer must submit the
final designs to Empresa Eléctrica Quito S.A. (EEQ). For the approval of the project it is necessary
to revise the design, verifying that it is within the norms of the company.
The Secretaría de la Zona receives the application for approval with the conditions required. The
assigned engineer reviews the technical documentation of the project on site, for verification of the
information presented. Any discrepancies between the design and the standards is discussed with
the private engineer responsible for the project. Once all comments have been addressed, the
Engineer Reviewer assigned proceeds to prepare the Technical Report. The Jefatura del
Departamento de la Zona reviews the technical report for their approval. The Secretaría de la
Zona reports and delivers the Project Approval Letter to the Private Engineer responsible of the
project. After receiving the Project Approval Letter, the private electrical engineer can start the
connection works.
5 Await completion of external works by electrical engineer 33 calendar days USD 28,000
Agency : Private Electrical Engineer registered with Empresa Electrica Quito (EEQ)
During the external connection, EEQ performs a review of the work done by the electrical
engineer (Work inspection). The purpose of this inspection is to ensure that facilities are
constructed as established in the approved project, that the correct materials are used and that
the installation is reliable and safe. In order to solicit the final inspection of the construction the
engineer has to submit the following documents:
• Project Approval Letter issued by the Company.
• Design Documentation Project Approved (folder).
• Order Form for inspection of the work.
The Private Engineer presents the request for Project Approval attaching the requirements
needed for this procedure at the Direccion de Distribucion Zonal which assigns an inspector to
review the work on the site and to coordinate the scheduled job with the area of Operación y
Mantenimiento. Finally, the auditing Engineer prepares the Notice of Charge for services provided
on site
6 Obtain excavation permit from municipality 9 calendar days USD 500
Agency : La Empresa Metropolitana de Movilidad y Obras Públicas de Quito (EMMOP-Q) en el
Municipio de Quito
The client has to submit the electrical project approved by EEQ with the application in order to
obtain an excavation permit.
Page 21Doing Business 2020 Ecuador
7 Pay security deposit and receive electricity flow 11 calendar days USD 1,001.64
Agency : Empresa Electrica Quito (EEQ)
The engineer in charge of the project requests the powering of the Work at the Secretaría del
Departamento de Fiscalización de Redes. The applicant should approach with the following
documents:
• Receipt of payment of work undertaken by the company on site.
• Reentry form of materials to the warehouse.
• Payment Receipt to the College of Engineering (CIEEPI). This receipt is no longer required
• Receipt of equipment and materials.
• Updated map with the requested changes.
• Powering request.
The Auditing Engineer is assigned to coordinate the powering of the work with the Departamento
de Operación y Mantenimiento Urbano/Rural. The powering works are done by the Department of
Operación y Mantenimiento Urbano/Rural , the department will report any updates or the
successful implementation.
The guarantee deposit is a deposit equivalent to one month's consumption, calculated at current
rates, by type of consumer. In the case of new customers, the value of the guarantee is calculated
based on estimated monthly consumption according to the installed load. The security deposit is
returned without interest when the consumer stops using the service, and is current with
payments. It is not possible to pay with a bank guarantee.
Takes place simultaneously with previous procedure.
Page 22Doing Business 2020 Ecuador
Details – Getting Electricity in Ecuador – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 7
Total duration and frequency of outages per customer a year (0-3) 2
System average interruption duration index (SAIDI) 2.1
System average interruption frequency index (SAIFI) 3.3
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0
Mechanisms for monitoring outages (0-1) 1
Does the distribution utility use automated tools to monitor outages? Yes
Mechanisms for restoring service (0-1) 1
Does the distribution utility use automated tools to restore service? Yes
Regulatory monitoring (0-1) 1
Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes
Financial deterrents aimed at limiting outages (0-1) 1
Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes
Communication of tariffs and tariff changes (0-1) 1
Are effective tariffs available online? Yes
Link to the website, if available online https://www.regulacionele
ctrica.gob.ec/wp-
content/uploads/download
s/2019/02/Pliego-Tarifario-
SPEE-2019.pdf
Are customers notified of a change in tariff ahead of the billing cycle? Yes
Note:
If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index.
If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.
If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.
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